SIOS Corp (3744) AI Stock Analysis

• Market Cap: ¥4.33B
• Dividend Yield: N/A
• Average Volume (3M): 39.75K
• Price to Earnings (P/E): 13.5
• Beta (1Y): 0.95
• Revenue Growth: -7.31%
• EPS Growth: 287.94%
• Country: JP
• Employees: 481
• Sector: Technology
• Sector Strength: 88
• Industry: Software - Application
• EPS (TTM): 9.74
• Shares Outstanding: 8,874,400
• 10 Day Avg. Volume: 32,170
• 30 Day Avg. Volume: 39,746
• PEG Ratio: -1.56
• Price to Book (P/B): 2.36
• Price to Sales (P/S): 0.23
• P/FCF Ratio: 23.55
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 61 Neutral
• Price Target: ¥528.00 ▲(4.55% Upside)
• Action: Downgraded Date: 02/18/26
• Date: Action: Downgraded 02/18/26

The score is led by solid solvency and improved profitability, tempered by thin margins and inconsistent cash generation (notably the 2025 cash flow step-down). Technicals are mildly weak/neutral, while valuation appears reasonable based on the P/E multiple.

Positive Factors

Strong balance sheet

Very low and improving leverage gives SIOS durable financial flexibility. With minimal debt and growing equity the company can fund product development, support operations, or pursue partnerships without immediate refinancing risk. The solid balance sheet cushions cyclical shocks even if returns remain volatile.

Return to profitability

Restoring profit after multi-year losses indicates structural operational improvements or cost discipline that are likely to persist if management maintains controls. Sustainable positive earnings enhance reinvestment capacity, preserve supplier/customer confidence, and reduce reliance on external capital over the medium term.

Recurring software & services model

A business built on software licenses plus maintenance/support and services produces recurring revenue and sticky customer relationships. This mix supports predictable renewal income, cross-sell of professional services, and higher lifetime value per client, aiding steady cashflows and long-term customer retention.

Negative Factors

Thin profit margins

Extremely low operating and net margins leave limited room to absorb cost increases, pricing pressure, or investment in R&D/sales. Small topline or cost swings can eliminate profits, making earnings fragile and constraining the ability to build reserves or aggressively expand without improving margin structure.

Volatile cash generation

Marked swings in operating and free cash flow signal working-capital or execution sensitivity. Unpredictable cash generation undermines the company's ability to fund capital needs, support consistent dividends or buybacks, and forces reliance on external financing during downcycles, increasing strategic risk.

Inconsistent revenue trends

Irregular top-line performance reduces visibility into future scale and weakens the leverage of fixed costs. Inconsistent revenue complicates renewal forecasting for maintenance contracts and professional services, increases sensitivity of margins to project timing, and limits confident long-term capacity planning.

SIOS Corp Business Overview & Revenue Model

Company Description

SIOS Corporation engages in the open system infrastructure and application businesses. The company offers digital transformation services to transform products, services, and business models; LifeKeeper, a failover software product that automatically switches a failed primary server to a backup server; open-source solutions; and open-source software products. It also provides Gluegent Gate, which manages ID in the cloud; Gluegent Apps group scheduler that adds team calendar schedule management function to Google calendar; and support services for system development and implementation to educational and financial institutions, as well as develops, markets, and updates document management software applications. The company was formerly known as SIOS Technology, Inc. and changed its name to SIOS Corporation in October 2017. SIOS Corporation was incorporated in 1997 and is based in Tokyo, Japan.

How the Company Makes Money

SIOS Corp generates revenue primarily through the sale of its software products and services, which are offered on a subscription basis or as one-time licenses. Key revenue streams include software licenses, maintenance and support services, and consulting services related to cloud migration and data management. The company also benefits from strategic partnerships with major cloud service providers, which enhance its product offerings and expand its customer base. These partnerships often involve co-marketing agreements and joint solutions, contributing to increased sales and market penetration.

SIOS Corp Financial Statement Overview

Summary

Balance sheet strength is a clear positive (very low and improving leverage), and the company returned to profitability in 2024–2025 after losses. Offsetting this, margins remain thin and operating/free cash flow declined sharply in 2025 with a history of cash flow volatility.

Income Statement

Revenue growth has been positive most years, including 2025 (+4.5%), but the top line declined in 2025 versus 2024. Profitability has improved meaningfully from losses in 2022–2023 to positive earnings in 2024–2025, yet current margins remain thin (2025 net margin ~1.7% and operating margin ~2.1%). Gross margin is reasonably stable in the high-20s to low-30s, but the business still shows sensitivity to cost and operating swings given the sharp volatility in operating profit over the period.

Balance Sheet

Leverage is very conservative and improving, with debt-to-equity falling steadily to ~0.03 in 2025 (from ~0.31 in 2020), indicating a strong balance-sheet risk profile. Equity has also grown since 2023, supporting better financial flexibility. The main watch-out is that returns on equity have been volatile (negative in 2022–2023, strong in 2024), reflecting earnings instability rather than balance-sheet strain.

Cash Flow

Cash generation is mixed: free cash flow was strong in 2024, but both operating cash flow and free cash flow dropped sharply in 2025. Free cash flow in 2025 still roughly matched net income (about 0.94x), suggesting earnings quality is reasonable, but the overall cash conversion from revenue is low and volatile across years, including negative free cash flow in 2022–2023. This variability raises execution and working-capital sensitivity concerns.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	18.24B	19.06B	20.56B	15.89B	14.42B	15.73B
Gross Profit	5.24B	5.29B	5.33B	5.22B	4.67B	4.88B
EBITDA	728.09M	458.04M	647.78M	-31.24M	-437.77M	488.81M
Net Income	447.38M	320.13M	351.00M	-18.88M	-639.79M	367.75M
Balance Sheet
Total Assets	7.54B	8.66B	8.09B	6.71B	6.02B	6.65B
Cash, Cash Equivalents and Short-Term Investments	3.34B	3.59B	3.68B	2.60B	2.51B	3.15B
Total Debt	73.10M	47.24M	102.30M	181.22M	222.95M	314.85M
Total Liabilities	5.91B	6.81B	6.55B	5.52B	4.78B	4.75B
Stockholders Equity	1.63B	1.86B	1.54B	1.19B	1.24B	1.90B
Cash Flow
Free Cash Flow	0.00	185.93M	857.00M	-13.01M	-432.52M	543.56M
Operating Cash Flow	0.00	198.64M	865.53M	28.49M	-370.38M	587.14M
Investing Cash Flow	0.00	-208.79M	298.01M	188.13M	-107.72M	58.01M
Financing Cash Flow	0.00	-70.98M	-127.98M	-157.72M	-245.87M	-267.44M

SIOS Corp Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 505.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For JP:3744, the sentiment is Positive. The current price of 505 is above the 20-day moving average (MA) of 501.45, above the 50-day MA of 502.04, and above the 200-day MA of 472.61, indicating a neutral trend. The MACD of -4.86 indicates Positive momentum. The RSI at 51.17 is Neutral, neither overbought nor oversold. The STOCH value of 68.78 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for JP:3744.

SIOS Corp Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
3648	74 Outperform	¥22.18B	10.37	―	2.40%	21.57%	129.44%
2307	70 Outperform	¥15.54B	10.03	―	3.14%	3.58%	0.23%
3826	70 Outperform	¥5.64B	7.44	―	2.28%	―	―
4826	70 Outperform	¥32.96B	16.65	―	2.83%	4.51%	75.35%
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
3744	61 Neutral	¥4.33B	13.54	―	―	-7.31%	287.94%
7527	47 Neutral	¥5.17B	-12.18	―	―	-40.57%	83.14%